Updated:Nintendo Considering Smartphone Games, Restructuring

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Updated:Nintendo Considering Smartphone Games, Restructuring

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While Satoru Iwata isn't going anywhere, he does admit that Nintendo is looking at the expanding smart device market.

"We failed to reach our target for hardware sales during the year-end, when revenues are the highest," admits Nintendo's Satoru Iwata, as he reveals that Wii U sales targets will fall far short of Nintendo's 9 million projection. But while Iwata says he feels responsible for his company's poor business performance, and apologizes to shareholders, he won't resign. Nintendo's business needs to be rejuvenated as quickly as possible, and Iwata will stay in the top spot to make that happen.

"There will be no major management shake-up in the short term," says Iwata. Nintendo had forecast a 100 billion yen profit, but is now looking at a 35 billion yen ($335.76 million) operating loss. The $14 billion profit that Nintendo built up over the years it made bank with the Wii is slowly being eroded, as Iwata dips into that cash stockpile to cover the Wii U's debts.

Only a few days ago, on January 10th, Nintendo shares hit a two-and-a-half year high of 15,880 yen per share. Since then, the price has dropped almost 10%, and analysts warn that a sell-off is inevitable in the wake of this unpleasant Wii U news.

UPDATED: Bloomberg reports that Nintendo's financial situation is leading Iwata to rethink the company's previous aversion to smartphone games.

"We are thinking about a new business structure," Iwata said at a press conference today in Osaka, Japan. "Given the expansion of smart devices, we are naturally studying how smart devices can be used to grow the game-player business. It's not as simple as enabling Mario to move on a smartphone."

Source: Yahoo, Bloomberg

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Yeah, I do agree that doing a management shake-up isn't going to help. However, the one thing that will bring the Wii U to a profit will be a strong advertisement campaign. There are still people out there with no idea what the Wii U is. Put a strong campaign, coupled with the games coming out and people will start buying it. It worked for the 3DS, now they need to focus on the Wii U.

Edit: Also, incoming people screaming to the high heavens that Nintendo will fail and go third-party, Nintendoomed, etc.

OUCH!

From 100 billion profit to 35 billion loss, I bet you could hear the shareholders jaws hit the floor, like a giant broke a tree over his knee!

Here I was thinking "it's a nintendo console, they will just roll out the regular games and people will buy it like alcohol at an college party" but this is surprising!

They need to aggressively advertise. I mean by a lot. I hardly see their ads on kids networks. Oh sure the games, but not the console itself.

Dragonbums:
They need to aggressively advertise. I mean by a lot. I hardly see their ads on kids networks. Oh sure the games, but not the console itself.

Was there even more a Wii U commercial for the Christmas? I know the 3DS was heavily advertised but didn't see anything for the Wii U.

xaszatm:

Dragonbums:
They need to aggressively advertise. I mean by a lot. I hardly see their ads on kids networks. Oh sure the games, but not the console itself.

Was there even more a Wii U commercial for the Christmas? I know the 3DS was heavily advertised but didn't see anything for the Wii U.

According to Nintendo youtube channel there were commercials of the Wii U. However I saw a lot more of the 3DS taking up the television airwaves. The same can be said for Wii U GAMES but not the system itself.

Dragonbums:
According to Nintendo youtube channel there were commercials of the Wii U. However I saw a lot more of the 3DS taking up the television airwaves. The same can be said for Wii U GAMES but not the system itself.

I saw those commercials, and the one I actually saw the most of during my day to day viewing called the Wii U an "upgrade". I literally facepalmed when I saw it the first time. With language like that they are only making consumer confusion first. Parent's looking at Wii U prices with "upgrade" in mind probably turned up their nose. Their marketing team needs to get their act together.

I like that Nintendo are pretty faithful to their management. I also agree with the situation, Nintendo were experimenting with a market that had never been tested before. We don't know how the people who bought a Wii would react to the new console generation and the Wii U could have paid off and made millions again. The money tap on the Wii was finally running dry and they needed something new.

And they even made some attempts to get back into the core market. But that was a difficult job considering the software situation of the Wii, and given the choice between the Wii U succeeding and making billions on the Wii, I'm sure everyone would choose the second option every time

xaszatm:
Yeah, I do agree that doing a management shake-up isn't going to help. However, the one thing that will bring the Wii U to a profit will be a strong advertisement campaign. There are still people out there with no idea what the Wii U is. Put a strong campaign, coupled with the games coming out and people will start buying it. It worked for the 3DS, now they need to focus on the Wii U.

Yup, shaking things up "just because people are angry" is only going to slow the company down. I am also inclined to agree with people that Nintento is and has always been a first party console. They've released one or two really good first party games, and those alone pushes console sales a ton. The problem here is content. While the 3DS has a ton of 3rd party games to compliment, the WiiU has none of that - devs have even openly denounced ever doing it. It's not that they NEED 3rd party stuff, but currently they're not filling in that gap with enough first party games. They've always been slow in making their games, but this time there's nothing in between those releases. No one wants to buy a product that only sees 1 new game every 4-5 months. The new consoles don't have much out yet either, but it's already more than the WiiU, with other games readily on the way.

Church185:

Dragonbums:
According to Nintendo youtube channel there were commercials of the Wii U. However I saw a lot more of the 3DS taking up the television airwaves. The same can be said for Wii U GAMES but not the system itself.

I saw those commercials, and the one I actually saw the most of during my day to day viewing called the Wii U an "upgrade". I literally facepalmed when I saw it the first time. With language like that they are only making consumer confusion first. Parent's looking at Wii U prices with "upgrade" in mind probably turned up their nose. Their marketing team needs to get their act together.

They finally got the ads right with the one commercial that basically spelled the whole thing out for the audience. I think it was on Kotaku as a featured article.(albeit criticized for being lame and cheesy) However that one came too late. They can always re run it again though.

BLEEEH. Crud. Time to make some tough investing choices I suppose.

For those who are curious, the drop has continued today with it sitting at 14.8 USD, when it sat at 18.95 USD just 7 days ago, for a drop of 17.59%.

Dragonbums:
They finally got the ads right with the one commercial that basically spelled the whole thing out for the audience. I think it was on Kotaku as a featured article.(albeit criticized for being lame and cheesy) However that one came too late. They can always re run it again though.

I might have missed that one, can you link it to me? The one I posted before was the only commercial I saw air on TV here, all of the others I saw posted online.

EDIT: As far as needing to spell everything out for their audience, the bulk of people who bought the Wii kind of need stuff like this spelled out for them. The vast majority of them aren't as familiar with gaming news as you or I. Sure there are still plenty of "hardcore" gamers snapping up Nintendo systems, but they are far outnumbered by the "casual" audience that made the Wii a success.

On that note, firing Iwata won't bode good for the company morale, nor staff stability. It only serves to make management freak, and wonder whose heads are going to roll next. Plus, Iwata being a code monkey back in the day during Nintendo at Nintendo himself, it probably won't help with what could be a distrustful and negative attitude from whatever new CEO they would put up there. Which is something you DON'T want as the head of a company.

He probably has plenty of chances left seeing as how he successfully made a big turn around for the 3DS that was doing poorly. What Nintendo should do is have the rest of the teams finish up whatever game projects they have for the 3DS and send out those games, then head them on over to the Wii U teams. Not stop 3DS game productions entirely. Just a sizeable chunk. The 3DS got worked on double time to make it a smashing success. Now it's time for the Wii U to get that same company care package. Focus heavily on the console until it bolsters sales, and is coasting on the profit waves.

Seeing as I have a 3DS I always get excited to see new games coming out for it. However I always cringe at the lack of Wii U game news.

As for X, it seems that the game is still going through a lot of work since nobody has heard anything on it. It is open world though. So I'm guessing, unlike Bethesda, they are actually going to iron out all the bugs, and makes sure players don't get crushed by hovering Mammoths.

Church185:

Dragonbums:
They finally got the ads right with the one commercial that basically spelled the whole thing out for the audience. I think it was on Kotaku as a featured article.(albeit criticized for being lame and cheesy) However that one came too late. They can always re run it again though.

I might have missed that one, can you link it to me? The one I posted before was the only commercial I saw air on TV here, all of the others I saw posted online.

Sure thing. It's was really on point, and something they should've done IMMEDIATELY when there was confusion about the Wii U. I honestly don't know what the hell Nintendo of America is doing right now.

http://www.youtube.com/watch?v=ybA6nGKi9pY

Also need to point out that putting in a new CEO would wreck the current game development, as if it's someone more in line with the investors the CEO can cut and cancel any game the investors find a 'threat' to the bottom line. So Bayonetta 2? Too risky with the content for the Nintendo brand, the game's cancelled. X? The scope and ideal is too big for the Wii U, it's on hold until further notice. A change in upper tier management may be good in some cases, it can also end up hurting both in the short and long run as well.

Dragonbums:
On that note, firing Iwata won't bode good for the company morale, nor staff stability. It only serves to make management freak, and wonder whose heads are going to roll next. Plus, Iwata being a code monkey back in the day during Nintendo at Nintendo himself, it probably won't help with what could be a distrustful and negative attitude from whatever new CEO they would put up there. Which is something you DON'T want as the head of a company.

Actually in Japan it is customary for the head of a large company to step down when their company takes a hit like this. Iwata staying at the helm may make Japanese investors very nervous, because they might think he will continue to take the company in a bad direction.

I'm not saying he should go, I personally think that Nintendo's biggest problem is not knowing how to follow up the success of the Wii. I'm just saying that his culture expects him to step down, which is why this is news.

Church185:

Dragonbums:
On that note, firing Iwata won't bode good for the company morale, nor staff stability. It only serves to make management freak, and wonder whose heads are going to roll next. Plus, Iwata being a code monkey back in the day during Nintendo at Nintendo himself, it probably won't help with what could be a distrustful and negative attitude from whatever new CEO they would put up there. Which is something you DON'T want as the head of a company.

Actually in Japan it is customary for the head of a large company to step down when their company takes a hit like this. Iwata staying at the helm may make Japanese investors very nervous, because they might think he will continue to take the company in a bad direction.

I'm not saying he should go, I personally think the Nintendos biggest problem is not knowing how to follow up the success of the Wii. I'm just saying that his culture expects him to step down, which is why this is news.

The issue in Iwata's case is that the Wii U still isn't doing stellar, yet at the same time he turned around the 3DS when it looked like it was going to be a double failure for Nintendo. Both occurred under his lead. So I think they would probably see Iwata's management right now as a "random card". By next year we will see what happens. I'm also curious as to what punishment would be dolled out to their overseas branches. It's clear that they also aren't really doing their job.

Dragonbums:
On that note, firing Iwata won't bode good for the company morale, nor staff stability. It only serves to make management freak, and wonder whose heads are going to roll next. Plus, Iwata being a code monkey back in the day during Nintendo at Nintendo himself, it probably won't help with what could be a distrustful and negative attitude from whatever new CEO they would put up there. Which is something you DON'T want as the head of a company.

He probably has plenty of chances left seeing as how he successfully made a big turn around for the 3DS that was doing poorly. What Nintendo should do is have the rest of the teams finish up whatever game projects they have for the 3DS and send out those games, then head them on over to the Wii U teams. Not stop 3DS game productions entirely. Just a sizeable chunk. The 3DS got worked on double time to make it a smashing success. Now it's time for the Wii U to get that same company care package. Focus heavily on the console until it bolsters sales, and is coasting on the profit waves.

Seeing as I have a 3DS I always get excited to see new games coming out for it. However I always cringe at the lack of Wii U game news.

As for X, it seems that the game is still going through a lot of work since nobody has heard anything on it. It is open world though. So I'm guessing, unlike Bethesda, they are actually going to iron out all the bugs, and makes sure players don't get crushed by hovering Mammoths.

Well, the thing is about Iwata being fired is this: it's impossible. Japanese companies are structured in a way that makes the President the highest authority. The Board of Directors serves HIM, they're made of people chosen by him and are always in-company. Shareholders have even LESS power, being relegated to shaking their fists impotently at worst. So, yeah, Iwata is going to be around for a LOOOOOOOOOONG time.

As for Nintendo, how about I say the completely undramatic but logical thing: they're not going anywhere, they're not changing, and they're going to react to knee-jerk bullshit because of a few measly losses. That would be moronic. If there's anything they need to do it's this: fuck the "hardcore." Seriously, bury it. Fuck the "hardcore", fuck impossible to please 3rd parties, fuck the West, and fuck anyone who tries to pull that strawman "oh, Mario and Zelda are all they EVAH make." Time to stop acting like those people are worth listening to because they just aren't worth it. Time to actually make gaming grow out of its insecure manchild shell.

When Michael Pachter inevitably spouts off on this, would someone please punch him in the mouth...? (Or just, y'know, not make like it's news, for once?)

It's odd to feel sorry for Nintendo, but I do. I think they could turn it around, and as more strong first-party titles like Super Mario 3D World make it to the system, they may. Given the stumbles in both Microsoft and Sony's launch titles, this is as good a time as any to make the case that while the competition is still struggling to show that the move to new hardware was worthwhile, Nintendo has started ironing out the wrinkles and showing off their own software to its best advantage.

I hope they can pull it off. I think we'll have a far more interesting market, and better games overall, if this is a three-way race rather than a two-way one.

Aiddon:
-snip-

While Japan doesn't outright fire people, they have many methods of making sure the employee in question takes the hint that they aren't wanted here anymore.

I'm not sure how they do it with CEO's, but with general employees, the make it extremely hard to work at their job. That along with the increasing workload of menial to stupid tasks like cleaning up, stacking papers, so on and so forth. By then they will get the hint and "quit" on their own terms.

This article says that Iwata is considering a new business model:

http://www.computerandvideogames.com/445870/nintendo-thinking-about-a-new-business-structure/

That's one good thing about Iwata. He acknowledges that Nintendo has made mistakes, such as when he admitted that they underestimated HD development.

Dragonbums:

While Japan doesn't outright fire people, they have many methods of making sure the employee in question takes the hint that they aren't wanted here anymore.

I'm not sure how they do it with CEO's, but with general employees, the make it extremely hard to work at their job. That along with the increasing workload of menial to stupid tasks like cleaning up, stacking papers, so on and so forth. By then they will get the hint and "quit" on their own terms.

With CEO's it's not like that, not in the least. The Board is his advisory committee and shareholders have no power. No one can actually do anything to make Iwata leave, and even "pressuring" him is not going to happen. This call to fire Iwata is pointless. It's akin to people smashing their head against a brick wall hoping to tear it down, only to have caused permanent brain damage. It's stupid. There is no need to worry about Iwata's job and even if he DID resign, he'd be the one to pick his successor. Nintendo will not do the same stupid shit their peers do

The staff may or may not need to change, but their thinking sure does. People still don't know what the Wii U is. Kids today aren't interested in it. They got a 3DS or a tablet or an older system with a big library. Those who do have a passing interest still don't see enough games to warrant purchasing it compared to a tablet, PC, Steam machine, PS4, Xbone, or even an older system. It has more games now than a few months ago. But, they if they are working on big things, they need to break their tradition of secrecy and let some details of what they are working on out. This system has a peripheral that the others do not, a cheap, large touchscreen/gamepad hybrid controller. Get some third party support back by funding more games like what their doing with Bayonetta 2. Get other publishers to see that controller could change the way their games could be played. Start some ambitious in-house games that blow away AAA titles on the other systems. A slighter less powerful graphics chip should not limit you on style. This new generation is even as much of a leap as the last one was despite it taking longer to come out. Nintendo still has their big ol' piggy bank loaded with cash. If they don't want to see it drained out slowly by a console that collects dust on shelves, they need to take out some serious cash and invest it towards building up the Wii U. Try at least a couple of these things, Nintendo.

Dragonbums:

Aiddon:
-snip-

While Japan doesn't outright fire people, they have many methods of making sure the employee in question takes the hint that they aren't wanted here anymore.

I'm not sure how they do it with CEO's, but with general employees, the make it extremely hard to work at their job. That along with the increasing workload of menial to stupid tasks like cleaning up, stacking papers, so on and so forth. By then they will get the hint and "quit" on their own terms.

Like Gunpei Yokoi, they got him to resign despite his insistence that the virtual boy was not ready to market. Despite making them Game and Watch, Metroid, the fucking GAME BOY (their own personal money mints), and mentoring their other prized designer, Shigeru Miyamoto, they made him leave after laying the foundation of the modern Nintendo that Miyamoto would lay bricks on. If they can do that, they can put pressure on whoever needs a fire lit under them to get the Wii U rolling.

EvilRoy:
BLEEEH. Crud. Time to make some tough investing choices I suppose.

For those who are curious, the drop has continued today with it sitting at 14.8 USD, when it sat at 18.95 USD just 7 days ago, for a drop of 17.59%.

Nooooo! I have such a huge investment in the company, a whopping 5 shares! I got them more as a novelty and because I can say I own a bit of Nintendo. Though I do feel bad for the real investors.

OT: Iwata is definitely not the problem, as others are saying here, an aggressive ad campaign was needed over a year ago. Sure they put out some more in the last holiday season, but Nintendo needed to have the media blitz reminiscent of the Wii. The games have actually come and more are on the way, Nintendo just needs to shake up their marketing strategy.

Hero of Lime:

EvilRoy:
BLEEEH. Crud. Time to make some tough investing choices I suppose.

For those who are curious, the drop has continued today with it sitting at 14.8 USD, when it sat at 18.95 USD just 7 days ago, for a drop of 17.59%.

Nooooo! I have such a huge investment in the company, a whopping 5 shares! I got them more as a novelty and because I can say I own a bit of Nintendo. Though I do feel bad for the real investors.

OT: Iwata is definitely not the problem, as others are saying here, an aggressive ad campaign was needed over a year ago. Sure they put out some more in the last holiday season, but Nintendo needed to have the media blitz reminiscent of the Wii. The games have actually come and more are on the way, Nintendo just needs to shake up their marketing strategy.

Well, I don't exactly have a controlling interest myself, but with more than a few shares its hard not to kick myself for not cashing out when they hit a two year high.

EvilRoy:

Hero of Lime:

EvilRoy:
BLEEEH. Crud. Time to make some tough investing choices I suppose.

For those who are curious, the drop has continued today with it sitting at 14.8 USD, when it sat at 18.95 USD just 7 days ago, for a drop of 17.59%.

Nooooo! I have such a huge investment in the company, a whopping 5 shares! I got them more as a novelty and because I can say I own a bit of Nintendo. Though I do feel bad for the real investors.

OT: Iwata is definitely not the problem, as others are saying here, an aggressive ad campaign was needed over a year ago. Sure they put out some more in the last holiday season, but Nintendo needed to have the media blitz reminiscent of the Wii. The games have actually come and more are on the way, Nintendo just needs to shake up their marketing strategy.

Well, I don't exactly have a controlling interest myself, but with more than a few shares its hard not to kick myself for not cashing out when they hit a two year high.

Oh yeah, even with just five shares, back when it was at the highest during the best days of the Wii, it was probably worth a pretty penny. If I ever get into serious investing, I may put more in. Especially right before a new Pokemon game releases. :P

They need to get it together. At this point if I was a shareholder I would be after blood but even as a consumer its really disappointing to see what nintendo is doing to itself. I would love to have a reason to buy a Wii U but I'm not going to buy one just to give nintendo a leg up. Hell even my 3dsxl is being considered for a trade in. They are not putting out enough games and they are not getting the third party support they need. I hope they work it out but until then its not my problem. I'm going to play video games regardless of whether or not nintendo wants to sell them to me.

Hmmm, well I can't say it surprises me. A lot of people predicted a Nintendo crash, and here we are. It doesn't surprise me that interest in the whole motion gimmick wasn't enough to sustain a second generation of the same thing.

I'll also say that while I like some of their stuff, I don't have the investment in the usual stable of Nintendo IPs that a lot of other people do, and truthfully it doesn't surprise me that this core audience is slowly fading with time as well, and/or aren't excited to leap at new hardware upgrades.

The thing is that the Wii systems have very few games that really excite me and saying "wow, I've got to play that" and a few like "Fatal Frame Zero" never make it to the US. Just to get some of the more successful RPG franchises into the US basically involved a massive campaign and forcing Nintendo and the publishers to localize them, kicking and screaming all the way. Needless to say the energy to keep doing that with decent games doesn't hold up.

See with the 3DS there is a decent stable of games I actually like and want to play, with a pretty robust release schedule. With the PS4 there might be crap for games out there, but I know from experience they are coming and trust that compared to Nintendo where a comparative drought is the norm, and it seems like all the games I'd want to play aren't available in the US, and by the time they make it here I've become invested in other things.

Truthfully, I think a management shake up is just what Nintendo needs. That, or someone in charge should seriously considering selling Nintendo before the brand is totally worthless, perhaps to either Sony or Microsoft.

Hairless Mammoth:
Like Gunpei Yokoi, they got him to resign despite his insistence that the virtual boy was not ready to market. Despite making them Game and Watch, Metroid, the fucking GAME BOY (their own personal money mints), and mentoring their other prized designer, Shigeru Miyamoto, they made him leave after laying the foundation of the modern Nintendo that Miyamoto would lay bricks on. If they can do that, they can put pressure on whoever needs a fire lit under them to get the Wii U rolling.

Again, nope, Yokoi was in a far different position. Yokoi was never in THAT high a position of power even if he did design the Game Boy. It's a completely different situation from Iwata, especially, like I noted earlier, it's impossible for him to get fired or even be pressured to resign from anyone. The means to get rid of Iwata LIE WITH IWATA ALONE. Those are the facts

I think that Nintendo should take the time and money to found a series of properties that are meant to be multiplatform. They can keep their Mario's and their Zelda's for their hardware, but their greatest strength has always been in the software they develop. Make properties with the intent of selling them cross platform. New IP's with some new ideas. You don't need to reinvent the wheel on this, simply make good games like always, and sell them on every platform, even the Wii U and 3DS. And let everyone know, if you want Zelda and Mario, you have to buy a Nintendo system. But you can increase income with quality software sold on many platforms.

Re-release the original Red/Blue/Yellow on iOS, make millions.

Or re-release on the eShop.

Or both. Make all the millions.

Aiddon:

Hairless Mammoth:
Like Gunpei Yokoi, they got him to resign despite his insistence that the virtual boy was not ready to market. Despite making them Game and Watch, Metroid, the fucking GAME BOY (their own personal money mints), and mentoring their other prized designer, Shigeru Miyamoto, they made him leave after laying the foundation of the modern Nintendo that Miyamoto would lay bricks on. If they can do that, they can put pressure on whoever needs a fire lit under them to get the Wii U rolling.

Again, nope, Yokoi was in a far different position. Yokoi was never in THAT high a position of power even if he did design the Game Boy. It's a completely different situation from Iwata, especially, like I noted earlier, it's impossible for him to get fired or even be pressured to resign from anyone. The means to get rid of Iwata LIE WITH IWATA ALONE. Those are the facts

For the most part you're right. They've mistaken the ominous "they" that forces people to quit in Japan for some ominous entity that works accost all of Japan. The people who force employees out are the upper level executives that Iwata is at the top of the chain on.

However, that doesn't mean that he can't be forced out, or removed. It would, however, require the Yamauchi family to force him out with a vote. No combination of outside stock holder votes can counter the head family's control. That being said Iwata is still liked by the family, and unless one of them wants to position of CEO I don't see them changing him. The only reason he's CEO is that none of them wanted the job, and viewed him as the only viable alternative to a family member.

Irridium:
Re-release the original Red/Blue/Yellow on iOS, make millions.

Or re-release on the eShop.

Or both. Make all the millions.

Sad part is the 3DS is more than capable of running GBA games, but they've still not released them to everyone. I mean hell, I get a lot of people pissed off when they see that I have Metroid Fusion, Kirby and the Amazing Mirror, and The Legend of Zelda The Minish Cap on my 3DS. Why haven't they released Pokemon Fire Red and Leaf Green on the eShop.

Does this mean Nintendo is going third party?

Karloff:
"Given the expansion of smart devices, we are naturally studying how smart devices can be used to grow the game-player business. It's not as simple as enabling Mario to move on a smartphone.

With all due respect to him, I think he's wrong. I agree that it isn't 'real innovation,' but NES and SNES titles are so basic (I mean come on, the controllers had like 4 buttons total) that it would be simple enough to squeeze the backlog out real fast. That could be a LARGE revenue stream that they currently lack, giving their budgets actual room to fix the problem long term.

Nintendo is a long term thinking company, but without a short term goal to get them to the long term they'll just sit there floundering for another year or two.

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